On Android, S3TC (= DXT) is the texture compression format of choice for Nvidia GPUs (= all Tegra-based devices). The default texture compression format (ETC) is not as nice-looking, and does not support alpha.On iOS, you're right, S3TC/DXT is not used, because the GPUs in these devices are made by a company named Imagination Technologies (I elieve they bought powerVR some time ago), who does not own a S3TC license. Instead, they have their own proprietary format called PVRTC (two variants, 2bits per pixel and 4bpp), that their GPUs can read and process instead of DXT textures.

As for no one using them, this is completely wrong: 3D games on mobile devices (think Shadowgun, Rage, Dungeon Defenders, Inifinty Blade...) all use compressed textures because otherwise the size of the assets would be significantly larger than it already is (think much longer download times and much higher bandwidth cost), and the GPU performance would be significantly lower (uncompressed textures occupy more space in video memory and their processing consumes more GPU bandwidth).